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The Escobar decision, one year later

One year has passed since the U.S. Supreme Court issued its highly anticipated ruling in Escobar addressing the scope and application of the False Claims Act—and it would appear government contractors have the upper hand.

As one of the government’s chief weapons against fraud, the False Claims Act (FCA) imposes liability on companies that knowingly make, or induce the submission of, false or fraudulent claims for payment or reimbursement to the federal government. Gradually, however, a split has developed among courts hotly contesting an expanded theory of FCA liability: the so-called “implied false certification” theory.

Such a theory—contested by whistleblowers and backed by the Department of Justice—holds that when a company submits a claim for payment to the government, it implicitly certifies compliance with all material statutory, regulatory, or contractual terms. Under that theory, failure to disclose a violation of, or non-compliance with, any of... To get the full story, subscribe now.